Charleston shutdown to hurt Wacker's 2018 polysilicon sales

Image from www.wacker.com.

March 13 (Renewables Now) - German chemicals company Wacker Chemie AG (ETR:WCH) today said it expects its polysilicon sales to be down in 2018 compared to 2017 because of the production shutdown at its Charleston plant in the US.

Volumes will be in line with 2017 but lower average prices for polysilicon will result in a decline in 2018 sales. The segment's earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to show a slight increase from 2017 on the back of cost-cutting measures and taking account of insurance compensation, the company said.

In 2017, the polysilicon business recorded a 3% increase in sales to EUR 1.12 billion (USD1.39bn), reflecting "a strong rise in volumes despite lower average prices." EBITDA climbed 2% to EUR 290.4 million.

Production was shut down at Charleston after on September 7, 2017 a hydrogen explosion caused by a technical defect damaged a plant section.

In the first two months of 2018, polysilicon sales were "noticeably" below year-ago levels. Chief executive Rudolf Staudigl said that demand is strong in all of the company's business fields and the chemical business will continue to grow in 2018. "In our polysilicon business, we currently lack Charleston’s output, but, in all likelihood, we can begin ramping up our facilities there in a few weeks’ time," the CEO added.

The company expects its overall sales to grow at a slower rate than in 2017, but earnings to rise "markedly" this year. Sales are projected to increase by a low-single-digit percentage and EBITDA by a mid-single-digit percentage. Currency effects and amendments to accounting standards are seen to cut sales by an amount in the low-triple-digit millions.

In 2017, Wacker's sales and EBITDA were both up by 6% to EUR 4.92 billion and EUR 1.01 billion, respectively. Profit from continuing operations rose 40% to EUR 250 million.